Smaller businesses may face challenges despite government support measures
Starting July 2024, Singapore will increase its Local Qualifying Salary (LQS) for full-time employees from S$1,400 to S$1,600, a 14% rise aimed at ensuring fair wages for local workers. Part-time employees will also see their minimum hourly wage increase from S$9 to S$10.50.
This adjustment, announced by Finance Minister Lawrence Wong in the 2024 Budget speech, is seen as a necessary step in keeping wages competitive. However, industry observers caution that smaller businesses, already struggling with manpower shortages, may find it challenging to absorb these higher wage costs.
To ease the transition, the government will boost its co-funding under the Progressive Wage Credit Scheme (PWCS), raising the maximum subsidy from 30% to 50% for 2024. This measure aims to support businesses in adapting to the new wage requirements while maintaining economic stability.
The LQS applies to companies employing foreign workers, ensuring that local employees receive fair compensation. This policy shift reflects Singapore’s broader efforts to maintain wage growth and workforce competitiveness amid evolving economic conditions.
